>> she's so cute. >> she looks like she was sleeping. >> she is. >> she is sleeping. anyway, thank you, guys. >> looks like she -- it looks like she was going to kiss. >> she was going to give me a kiss? >> yeah. >> thank you very, very much. >> happy birthday, andrew. >> thanks, guys. it is fun. thank you, too. join us tomorrow, squ. "squawk on the street" begins right now. happy birthday, andrew. good tuesday morning. i'm carl quintanilla. jim and david are off today. decent setup with the premarket higher. good news from walmart and home depot. europe is up on a strong euro zone pmi, the highest in 70 months. watch oil. could hit $70 by year end.

big day for retail. walmart announcing the best quarter in more than four years. home depot beating estimates. >> kraft drops its $134 billion takeover bid. irene rosenfeld will join us later. new records. the dow up more than 4% since inauguration day. how long can the trump rally last? first up, walmart reporting a better than expected quarterly profit. revenue just shy of consensus. online sales up 29. home depot beat its quarterly results. boost the dividend. macy's posting a revenue miss earlier on "squawk" today. the ceo addressed speculation the company is up for sale. >> first of all, you've heard it talked about, rumors of the company buying us. >> yes. >> you've also probably heard the rumors that we're buying

them. >> yeah. >> so what i can tell you is this, that we're going to do the right thing for our shareholders and we're not going to be a highly leveraged retailer. those movies never turn out well, and we've seen that before. >> a lot to chew on here. a lot of discussion as far as macy's goes as far as the strength of the margins, given how challenged the business has been for the past year. >> it is a tough one. i mean, we know about this industry. we know the struggles that macy's is facing. now, the question becomes a strategic one. >> i think we've got the holiday sales warning miss. the shares are up across the sector this morning, but none of these are big beats. share prices suffered a lot. it is a rebound. invento inventory, we knew, is well managed and picked up margins a bit. on the wall mort fromart front, inventory is something they've controlled welcoming into this. the online sales up 29%. that's where they have to make

up the ground. that was a slightly better than expected number, and that's why shares are jumping on the walmart front. >> how about home depot though? those sales figures were incredible. 5.8% comps versus a 3.7% expectation. the earnings was a beat. the revenue was a beat. raising the dividendividend. they continue to execute. it is one of the best performing stocks of the decade. >> a strong housing market and a decent consumer playing in home depot's favor. >> back to the terry lundgren interview, came back to the same question at the end of the interview. his answer was convincing. he didn't feed the fire of it being a possibility. he said, i can speak about where we are now. we're trying to act as a company in that position, acting stand alone. i don't think he was confident by the end of this year or whenever, whatever time frame you look out, it would be the same.

>> i don't know, strategically, what you do in this market. everyone in retail is realizing they have to get into the discount stage. >> lundgren goes to chairman a month from now. few weeks left as ceo. >> let's bring in our guests this morning. robert is with us, managing director and retail analyst. steve is with us, as well. the former home depot ceo. great morning to have you with us. office depot. excuse me. what do you make of the numbers the retailers are putting up today? >> from the walmart perspective, this is encouraging from a lot of their own company's specific initiatives but also the u.s. consumer. one of the more interesting data points on walmart is traffic was up 1.4%. when you think of all the releases we've heard over the last 60 to 80 days in retail, walmart continues to generate traffic gains in an environment

where ecommerce is a bigger and bigger portion of the u.s. consumer. >> steve, of office depot, excuse me for that, what about you? especially in the case of a company like home depot, which we talk about the retail environment being a challenged one, is executing admirably, especially with competition from amazon and others. >> clearly, home depot is doing a great job, but remember, we have about eight years of deferred maintenance if the housing market. i think carl is right. we're getting a little rebound there. the true story here is ecommerce. because you see walmart finally getting a 29% boost. this is the first clean quarter following their ack -- acquisition of jet.com. this is a clash of titans with amazon. you have amazon holding ten times as much ecommerce sales as walmart. they have about 50% market share. walmart would have to buy everybody else to catch up with

amazon. doug mcmillen and his team are top quality. they're doing the right things. but they really have a long way to go. this is heartening to see the sales line move on this thing, even with a 20% earnings decline. >> steve, of course we've also seen in recent weeks amazon is making a push into brick and mortar grocery stores, and that screams warning signs, of course, for margins across the sector. that said, are walmart the only retailer that can deal with the push and, long term, given their size, will we see big market share gains for both of the companies, as opposed to walmart losing out, per se? >> i think that's exactly right. up to this point, amazon over the past couple years has taken market share from everybody. 100% of the market share in retail has gone to amazon. walmart is fighting back. this is critical. for 40 years, walmart has killed every retailer, every category, every mom and pop in every small

town in america. now, it is coming back to them, with amazon taking over this whole channel. the amazon fresh investment is going very well. it is a regional investment up to this point. but everything looks good here. they have to get some bricks and mortar to get a forward supply chain to get the last mile in place. look, amazon looks formidable, but it is interesting to see walmart's efforts finally pay out here in this quarter. >> they are breaking out u.s. ecommerce for the first time. 36%. is that a good number or not? >> excellent number. >> is it? >> one of the things walmart focused on is blending physical with digital. when you think about the jet.com piece of it, the new management under walmart.com, but walmart is working really hard to integrate online grocery, grocery pick-up in the stores, buy online and pick up in stores, and with a lot of the returns, you can return it to walmart stores, generating traffic. they're getting traffic from that perspective. i just think they're doing an

excellent job with the business and fwleblending it all, the strategy and executing everything they've laid out on this initiative. >> border adjustment came up on the call this morning. they say if it were to go through in its current form, high probability the cost of goods goes up, right? no argument there. >> right. >> do you have any clarity on what this will look like? >> i don't believe we do, no. >> much like taking on amazon, is walmart one of the few retailers that can stomach a border adjustment tax and come out looking a little better than the rest of the sector? >> i think we need more details on the border adjustment tax. when you think about the level of importing that's going on, it will go through in a situation that, you know -- being discussed today, it would be a very significant hit to many of the u.s. retailers, without a doubt, given the level of importing. >> steve, anything you'd add to that? >> any border adjustment or tariff added to imports will hit

anyone who is bringing in the supply -- global supply chain. that hits food less because more food is grown domestically. walmart is more developed in food than others. and grocery is a little more protected. remember, our supply chain for the past 50 years has moved offshore on hard lines and soft lines. it is going to be a cost increase and, therefore, a price increase for the american consumer if we do this. it is not a good idea. >> what is your view on macy's, in terms of whether this better than expected result is a turning point or just a short term positive? >> it is hard to say. i think up to about 18 months ago, every expert said that amazon and ecommerce could not do soft lines. in fact, 100% of the market share gains in soft lines have been coming and accruing to amazon. it's come out of macy's and other soft line retailers. i think this is a good thing, but there's been some investment to do it. the question is whether it is sustainable or not.

i fear that it is monot. they've got this enormous pric s -- bricks and mortar overhead. it is different than amazon's cost structure. >> thanks, robert and steve. speaking of sustainability, steve has "sustaining capitalism" out this month. the u.s. markets getting a chance to react to heinz withdrawing its offer for unilever. sarah eisen is live in boca raton, florida. sarah? >> good morning. certainly the deal making drama over the weekend making this all the more exciting. food stocks have had a pretty strong few years in the market. outperforming the broader s&p. why? they're considered safe. they pay fat dividends and a low rates world. they have been a hot spot for deals. that certainly includes kraft

heinz. dropping unilever. reversing the jump we saw on friday. look who is up at the bottom of the screen. mondelez. the global snacks giant, as the spotlight returns to who kraft and 3g, which controls kraft, will guy next, mondelez was a top contender. it dropped on word that kraft was chasing unilever. companies are under pressure to figure out how to grow again. that's why we're seeing so many announcements on healthier products as the industry tries to catch up with millenials who want fresher, cleaner ingredients. it is a trend that's led to virtually no top line growth for these big food companies. that's why they're all in cost cutting mode to try to beef up margins and boost profits. they're trying to figure out how the new administration's policies on taxes and trade, in particular, will affect the food

business. food is at the intersection of global imports and exports. some big ramifications here. we'll speak exclusively to three food giants at the forefront of the issues. the ceo of mondelez will be in the next hour. the new ceo of titan foods is also here. this is a big deal when it comes to poultry, pork and beef exports to mexico. they're a buyer. and sean connolly is here to talk about how they are change ago 100-year-old portfolio of food. will fre wilfred, i know you're on a diet. i'll find new food innovation that is healthy. >> not meant to be public knowledge, sar ray. >> is it true? >> i'm just being healthy, training for a charity bike ride. thank you for revealing the worldwide secrets. >> there are no secrets. >> i'll add one more thing, back in the uk over the weekend,

amazing how much coverage this potential takeover got just in the mainstream press. everything is so politicized. clearly, a story for us but it was across all the different press agencieagencies. because it is brexit related. it was attractive because of the fall in the pound. but also whether it is necessary to protect the jobs. also very fresh in people's minds. there was a promise when they took over they'd keep factories open. they closed quickly, and people got it fresh in their minds. it was politicized quickly in the uk. when we come back, a look at what to expect this week from the president. also ahead, vanguard founder jack bogle. the premarket, the dow is going for eight consecutive gains. longest streak since july. more "squawk on the street" continues in a minute. r walkingh my first options trade. we only do it for everyone gary. well, i feel pretty smart. well, we're all about educating people on options strategies.

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for that position after the firing of mike flynn last week. mcmaster served in both the iraq wars and in afghanistan. he's also said to have been chosen because he is a warrior and defense intellectual. he wrote a book critical of the joint chiefs of staff in the vietnam era for their cooperation with lyndon johnson and not giving him direct information of how the veet vie war was going. later in the week, we may see a revised executive order on immigration. we're also waiting for more details on tax policy and obamacare policy. not clear whether that's going to come out this week or not, guys. as always, a lot going on here at the trump white house. back to you. >> a lot of people looking into mcmaster's world view this morning. relative hawk on russia and people wonder whether that's going to transfer into executive branch policy. >> a hawk on russia and also somebody who made a reputation for himself as being willing to

speak truth to power. that's not something that's necessarily been embraced by the trump white house, in terms of their own lieutenants and lower down figures, talking back to the president in terms of policy. he said he wants people in positions of power who will have their own world views and their own opinions and be willing to express those. we'll see how that relationship develops with mcmaster over the coming weeks and months. >> thank you very much. when we return, snap takes the road show to the big apple, looking for the much anticipated ipo. looking at futures. we are higher off decent retail earnings. 1.5% to 1.8% of gains. banks leading the charge. utilities lagged last week. 65 points on the dow. more "squawk on the street" from the new york stock exchange ahead. fees? what did you have in mind? i don't know. $6.95 per trade?

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♪ the snap ipo road show goes to new york today. executives will pitch its offering to investors. meantime, facebook's what's app adding a story feature, similar to snapchat. the tool, status, lets users share images, gives as a status update which lasts for 24 hours before disappearing, guys. sounds familiar. >> yes. this is a pattern developing here of facebook's properties emulating what snapchat does. they have the added responsibility of convincing or telling investors why they should buy a stock with no

voting rights, where user growth is minimal, right? >> this reminds me of this thing about how you should invest in the good copycats and not necessarily the originals. facebook is proving it can be a copycat of a product like snapchat or new social media thing that may come out. incorporate it to instagram or what's app, facebook itself, that's probably the place to invest. >> separately, lots of people saying one of the reasons that snap brought forward the date of the ipo and the reason it is near the bottom of the range is because of instagram introducing the story function, which was a growth area that snapchat enjoyed over the prior 12 months. it is eating into the ipo but only a little bit. it'll still be a massive ipo. just as a side point to this, interesting to see, we have lots of big m&a talk at the moment. post trump election. none of it materializing yet. you're reminded how many hurdles there are to get over to get the big m&a deals. the same is not true on the ipo

front. lots to market, rushed on. same is true in europe, as well. i think it'll be a boom for the investment banks when we get to q1 earnings toward the end of the quarter. it is something they were bullish about. >> already looking at the race to list saudi aramco. >> how close are we? >> right. >> you kind of get closer and then it seems like it might be further off. a huge win among the banks on the deal. to the point about snap, this is the banner tech offering ipo of the year. there's much more at stake here beyond just how snap itself does. but what it is for everybody else. >> absolutely. the saudi aramco, as well, will be a big one. snap is what we're focused on. march 1st, the date, next wednesday, set for -- london was yesterday for the road show. moving quickly, which suggests that interest is high and they're not worried about drumming up support.

>> atlantic equities, a uk shop, slapped a neutral on snapshot. they're not an underwriter of the offering but said, look, how does snap get past twitter, when it slowed down, and will it be based on ad revenue? it's been successful for google and facebook. if snap is a camera company and doesn't want to pursue that, what exactly, territory, are they going after? >> the snap glasses are available, as well, not just ♪ sn in the snap stores. they say there is a limit of six pairs per household. a bullish limit to put on there. >> i don't need six. >> exactly. >> i'm trying to figure yeout ii need one. you mentioned m&a. it is an amazing morning for m&a. yahoo! and verizon. you mentioned kraft heinz. >> popeye's. >> usr, going to be a nice

conglomerate. >> doing the yum thing. the copycats. they look at yum and see what works, we have tim horton's and popeye's, we can build our own. >> did we get an answer, whether we'll get popeye's during the show? >> looking up the closest location. >> i've never had it. >> what a health kick before your bike race. >> yeah, well. >> don't tell sarah. >> it is not going well, as i said. >> apparently not. the opening bell is in a couple minutes. >> it is research.

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you're watching cnbc "squawk on the street," live from the financial capital of the world. the opening bell in two minutes on this tuesday. hope you had a good, long weekend. lot of news to come back to, including decent retail numbers out of home depot, walmart and macy's. pmis look strong in europe. we're going to finally put the q on earning season to close. this will be, believe it or not, right in front of warning season next month. >> right. >> then beneficials on the tape. we have harker and williams later on today. harker, of course, said he will not take march off the table. still sees three hikes this year. >> that's also a point to focus on. last week, that was the story, was a belief that we could get rate hikes sooner.

it reignited the inflation, dollar went up. it allowed banks to carry the rest of the market higher. utilities suffered last week. 1.5% to 1.8% of gains last week. so this week, futures are a little higher. >> this is the president with ben carson at the national museum of african-american history and culture. where the president started his day today. later on this morning, he'll get his daily intelligence briefing, lunch with tom barek, friend of the show, national security briefing this afternoon and dinner with the vice president tonight. not a lot of public forums for the president today but he'll be getting a lot of work done. >> starting on a positive note, with the appointment of mcmaster yesterday, of course, and being roundly applauded for that appointment. of course, a change in tone to what we had from last week. meanwhile, dow is going for eight straight gains.

hasn't had a streak that long since july when it did nine in a row. all three major indexes coming off record closes. the nasdaq has still not had back-to-back losses this year. there's the s&p at the bottom of your screen. the big board, it is clpr reality, celebrating their ipo at the nasdaq. water stone financial doing the h honors. we'll find to what degree the dow will be carried by depot at the open. dow jones industrials. see where depot comes in on the components. walmart and home depot look to be the best performing components of the open. >> retail is leading the way. haven't seen that in a while. interestingly, it is the nasdaq, closed higher 18 times this year. it is the highest number of records for the nasdaq since 1999. >> walmart up 2.8%. a big move in that, of course. that was where it was in the

futures market. it slipped a bit in the last hour of the futures market. strong open, near the highs of the day in the premarket. up 2.7%. home depot, up about 1.5%. interesting to see boeing just behind that earlier, just below 1% of gains this morning for them. >> we have to just look at the big consumer staples companies today. i mean, the fact that kraft heinz went after unilever, yes, it didn't happen, we'll see whether something is consummated, what happens is unilever has to buy somebody else in order to bolster its defenses against another takeover? who is kraft heinz's next target? >> mondelez is up 3.9% this morn lg. interesting to see p&g down 0.5%. unilever slipped -- its comparable slipped yesterday in

london's trade. gains from friday slipped on monday opposed to today. >> there were some companies up on the deal because the idea was it would be consolidation in their space, benefitting from some of that. others sold off because it seemed like they did not have a seat at the table in the c consolidation that was happening in the industry. that's why now everybody is going to think about, do they want to be a protagonist and collapse some of this? >> what a morning to have sarah eisen around this discussion. general mills, campbell, mondelez could be targets. the journal argues talks may not be done, even though you require a pause in europe. >> because of the way unilever talked about it, it was like, look, this may not be the price. there is a part of this, especially the uk press, saying it has to do with the brexit post currency weakness. they didn't say this is insane and makes no sense.

unilever has done itself no favors by not pursuing buybacks. the last time they did buybacks was 2009. in other words, if they're not going to pursue those measures for shareholders, who have seen rivals do better, it'll be hard to fend off a deal like this. >> this is manifesting as pressure on the managementment of unilever to do more. can't have another bid for them for the next six months. we'll have to see what happens more broadly as we've said. interesting, kraft heinz is down sharply. it was a deal up. >> when was the last time we saw the inquirer go up significantly, on a deal with this much debt, by the way. >> yup. interesting retail dwomevelopme. tiffany close to a year and a half high. reporting three independent directors. roger farrah, an icon of retail.

we know about tiffany's challenges with tourism, the strong dollar, the flagship store, of course, in new york city. but that's pretty nice level here. tiffany's not seen 88 in a long time. >> i can't believe how quickly they've done this round trip. seemed like they were under so much pressure. the ceo leaves and they're able to shore it up a bit. >> just another couple of gainers this morning. apple is up around 0.5%. morgan stanley put out a new note. they upgraded the price target to 154. morgan stanley saying china is key to the super cycle. those numbers, the china sales numbers, were better than expected in the last -- other emerging markets, up 0.5%. >> manufacturing services for the u.s., already had a bunch of data out overnight, it'll feed into that. fundamentally, as we're talking about earnings and the fed

rhetoric about how strong is the growth, how much might they raise rates this year. >> key . as we've already said, mes fed rate expectations increased over the week. that helped banks perform last week. yields are up a little from friday's close. not massively. we've got jpmorgan, goldman sachs, and last week, of course, the bank sector was up 2.8%. you had individual names like bank of america up more than that. again, that's really sparking this trade. i think in one sense, slightly flat of the overall market performance last week. banks led the charge and pulled the rest of the indexes up. >> underpinning that is how the data keeps improving. the flash pmis matter. 55.5 on the services. high levels. you need to see the numbers come in better than that to sustain the optimism that's driven us to record highs. >> not just europe either. europe with the 56 print. japan with the 53.5, the best

going back to march of '14. i'm just looking at goldman. i mean, since october, it's been below the 50-day for, what, three sessions, something like that. >> wow. >> after taking up to 250, now 251 and change. >> yeah. it gets a little bonus, goldman, from people buying the dow. people buying the index opposed to fundamental reasons. across the sector, i didn't just say contrast. hong kong and london trade this morning, down 7% or 8%. again, highlighting the difference in performance from u.s. banks -- down 7% last time i looked. >> wow. >> various one offs and write downs. fundamental weakness in the uk and hong kong. >> are they leaving the uk? >> up to 1,000 jobs moving to paris, based on when they see the details of it. >> to paris ? >> that was announced a few months ago. >> political uncertainty in paris, too, by the way.

they have an election coming up. >> they do, indeed. barclays in a couple days, earnings. they're one of the few uk banks that have benefitted from the uptick in the u.s. >> by the way, watch oil today. up a buck. citi increases their targets for q1 and q2 to $55 and $56. they warn brent could hit $70 by the end of the year on the upside. >> even as everyone is talking about peak demand, quote, unquote, for gasoline, it was an oddly low gasoline demand number last month. yeah, there's a lot of surplus on that. more of a refiner issue. still. >> oil broke a four-week win streak last week. bouncing back off the decline last week. >> record highs, s&p, 23.57. let's get to bob on the floor. >> happy monday, everybody. nice start to the week. 2:1 advancing to the stocks. let's look at the overseas

markets. yen weakness in japan. uk was on the upside. germany, 11,933. you heard kelly talking about that helping things. in the u.s. -- by the way, talking about recovery commodities, look at bhp. dividend, 40 cents a share, double a year ago. talking about confidence in the recovery in the commodity market here. that, of course, has been a monster all throughout the year on that story. here in the u.s., look at the s&p 500. four consecutive weeks of advances. what happened to february was a down month? it is traditionally. not so far. 3% gain for the month of february. take a look at the sectors. retailers are leading right now. home depot and walmart helping. energy up. heard about oil being on the upside. banks and tech also leading. all the ones you want, particularly banks and tech today, are leading the market. food companies we talked about, of course. when kraft heinz backed away, general mills, kellogg, on the

upside. campbell is flat right now. home depot, historic high once again. revenue is better than expected. here's what's important to me. 29% dividend hike and a $15 billion share buyback. that's almost 10% of the company they're proposing to buyback. home depot is what i call one of the dividend or buyback monsters that exists out there. they have aggressively been buying back shares for many years. in fact, they're half the amount of shares they used to have back in 2003. nearly 2.4 billion. today, 1.2 billion. that's half. and they'll reduce it to 1.1 in the next year or two. a number of other companies have been buyback monsters. ibm did the same thing. they hit the share peak in 1997, nearly 2 million. today, under a million and they keep dropping. exxonmobil, they reduced it by 40%. 7 billion in 2000 and now 4.1 billion. most companies hit the highest

share counts between 2000 and 2004. they've been dropping ever since. if you look at some of the big industrial names out there, northrup grumman, 50% since 2003. csx, mmm and utx, nearly 30%. the tech companies have been buying back shares since early 2000. microsoft, intel, cisco, 30%. it changes the dynamics. even the consumer names, travelers, gap, bed bath & beyond, mcdonald's and disney itself, all down 50% to 60%. some cases, a little less than that. mcdonald's, 36%. procter & gamble, 24%. why is this all happening? why are they aggressively buying back their shares in the last 115 years or so? number one, they have to support the stock options. on the other hand, they have to buy back some or the share count goes up. finally, we've talked about this

many, many times, there's just less opportunities for top line growth. when you don't have it there, the way you help the share count, prices, is reduce the share count overall and return money to shareholders also in the form of dividends. call it financial engineering, whatever you want. that's the way a lot of companies moved their share prices forward in the last serch -- seven or eight years. >> we're about to crack 20,700, bob. let's send it to the bond pits and check in with rick santelli in chicago. morning, rick. >> hi, kelly. you're absolutely right. only six points away, of course. three points away. two points away. how exciting. look at a 24-hour chart of tenure. you can see that there is a bit of a drift. up 3% or 10s and 30s. a curve steepening today. the tens, virtually unchanged. closed around 244.5. close to where we're trading.

one week of bound, they've reserved a bit. up a bit in terms of yield. let's look at the other european sovereigns, shall we? especially with all the news going on, whether it is triggering article 50 in the uk or la pen in france. you see the gilt, a little lower on the year. france, a little up. the dollar index, yes, it is down on the year but it's taken and overtaken the 101 handle as it sits between 101 and 102. 20,703. carl, back to you. >> all right, rick. thank you very much. rick santelli. on that note, the rally is continuing. u.s. markets with new records across the board. dow, nasdaq and s&p up 4% since inauguration day a month ago. let's bring in jack bogle to talk more about the markets. jack, good to see you again.

we've got these record highs. the market is expecting washington to chop a lot of wood. the whole world wants our assets. the dollar is up . are you feeling that confident? >> i don't feel super confident. i mean, this is a big rally in the market. clearly a bull market, or a mini bull market. when we look out in time, and i don't pay a lot of attention to the daily things that happen along the way, i look like in ten-year intervals. ten years, looks like our gdp might grow at 2% if we're lucky. sooner or later, the link between gdp, gross domestic product and corporate profits is 0.98%. i look for a slower in profit growth. decent but much slower than we're accustomed to in the past. low dividend yields and high valuations. so well above knonormal. i don't think it is any point in getting carried away. >> when reports come out like

last week tharks t, that the wh see gdp up 3% to 3.5% in the coming decade, you don't buy it? >> well, they may be smarter than i am, but i'd be much more conservative than that. most of the leading economists are really pretty much in my camp, or i'm in their camp, i guess i should say. it is very hard to get that kind of growth with the economy the way it is, the way it is structured today. >> jack, i don't know if you saw charlie munger's comments last week at the daily journal meeting about index investing but he said we're at a point where if everybody goes into index funds, it won't work as people expect. he drew an analogy to the nifty fift fifty. >> there is a misunderstanding about what indexing is about. you can index the entire market and there is no favoritism. the blue chip of the day. you own your fair share of every single stock in the u.s. market.

it is around 2,000 stocks, maybe a little less than that. the s&p 500, which is the usual index thing, standard, is probably 85% of the total market. i don't see there is much getting out of line here. i'd also add that when you think about it, if the market is less efficient, some managers will be able to win. no question about that. but they'll be accomplished dollar for dollar by managers able to lose. that's the math of the marketplace. here i am in my 21st heart birthday, celebrating that miracle, but also celebrating the revolution that indexing is bringing to the financial market. it is basically all about taking cost out of the system. so the reason indexing is done so well is because it gives the investor a fair share, his or her fair share, of whatever market returns we get. that's all there is to it.

diversify away, run it at low cost, low turnover, high tax efficiency. the public is recognizing that. as you all know, in spades. here i am on my heart birthday, we'll celebrate it at jefferson hospital with my heart surgeons of 21 years ago. celebrating not only a miracle but the triumph of a revolution. it is nice to be around to see it. i'll tell you that. >> it is nice for us to have you around, jack. i'm curious, what was your prognosis at the time? did they say 21 years was a possibility? >> they don't talk in those terms, but i think for someone 65 years old, pushing the limits to get a transplant, that i would be way beyond a 65-year-old expected mortality. still got plenty of energy. not quite as much as i've had in the past. still do a lot of speaking and writing. i'm enormously busy, working

hard, trying to be a super ager. keeping on past the normal limits. having fun doing it and in deep debt to my surgeons and my cardiologist, who is at the university of pennsylvania hospital. dr. susan. and so i've had continuing care that makes this miracle work and work so effectively. i may be -- i don't want to be carried away here -- the luckiest guy in the world. >> jack, we're delighted, as carl said, that that's gone so smoothly. with that in mind, what is your outlook for health care under the new administration? >> well, i don't think anybody has a clue, including the new administration and including the congress, what the new health care plan will look like. it was easy to swing a big ax and say, we're going to get rid of it the day after i come into office or whatever the statement was, as soon as i can get rid of it, but it turns out tb difficult to get rid of.

a lot of people are depending on it. it is now politically sensitive. that is a major increase, cost increases, for the least favored among us in our society. i don't think it is tolerable in a fair society like that of the united states of america. so i think it is going to be much less of a conversion than anybody would have dreamed of at the beginning. >> jack, good to have you. congratulations on one of the best anniversaries you can have. good to see you. thanks. >> okay. thanks, everybody. good to be with you. another day, another record-setting session for stocks, as we said. 20,700. the russell joining the s&p and nasdaq on record highs. back in a moment. my business was built with passion... but i keep it growing by making every dollar count. that's why i have the spark cash card from capital one.

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president trump about to make some impromptu remarks at the national museum of african-american history and culture in washington, where he started a tour around 8:30 a.m. with hud secretary ben carson.

he's given a brief comment to craig melvin of nbc news about the jewish community centers and reports of receiving bomb threats since january. with regard to anti-semitism, the president told craig melvin, it is horrible and has to stop. no word whether this will reflect that. >> there is no press core. he will address what he feels needs to be addressed. it could be that or the setting we find him, or some of the moves he made, in a reference to bringing together his cabinet and getting everybody in place. >> could be about h.r. mcmaster, the new national security adviser. secretary of state tillerson and department of homeland security kelly go to mexico city tomorrow, where they'll meet in mexico city. it might raise the curtain on some of that. also, the immigration executive order expected to be revised.

ap reporting it could exempt those with green cards, dual citizens. could change by the time the president signs it. things the president could address today. >> comments over the weekend by members of his administration, including vice president mike pence, taken went by europe. clear commitment to nato. the tone at the start of this week, better than the tone of the end of last week for the president, particularly the appointment of h.r. mcmaster which had resounding applause from both sides of the aisle, i think, including a member of his own party who had been critical in terms of john mccain outlining a resounding support for that appointment over the weekend. >> eamon, any other intelligence about what we might here? >> you're looking at a white house that values spontaneity. we're told here that aides put out this lectern with the presidential seal on it in case the president wants to make some remarks. no guidance on what those remarks would be. as you noted, he is touring the african-american museum.

brand-new museum here on the national mall in washington, d.c. some of the reporters traveling with him noted he just saw an exhibit on president jefferson entitled the paradox of liberty. talking about some of the slaves that jefferson owned himself. looking at some of the exhibits which include actual slave shackles from the president's period of time. so clearly, this is something that is going to be on the mind of this president. he also looked at an exhibit, touring with dr. ben carson, an exhibit about dr. ben carson and his neurosurgeon garb and some of the history of carson's ground breaking efforts as a surgeon. all of those things will be on the president's mind. what he wanted to address the press about today is anyone's guest. they've given us no guidance on what to expect. a lot of possible topics. we'll have to wait and see. >> yeah. carson's part of the museum. john lewis has an exhibit in that museum. another well-known d.c. figure head who trump has had run-ins

with in the past few weeks. the other thing is this report in the hill over the weekend citing lindsey graham whar, tha ryan plan for tax reform wouldn't get ten votes in the senate, as the debate over the longevity of border adjustment tax continues. >> yeah. i don't know if ten votes is an actual count or not, or if that is rhetoric, but there clearly is tension between the house side and paul ryan, who has a very different vision for tax reform than what they'd like to do on the senate side. typically in these cases, what you have is a white house which lays out its vision for what it would like to see legislatively and members of congress hash out all of the details. in this case, you have paul ryan leading a charge on one approach that's not necessarily being embraced on the senate side among republicans there. not clear where the white house is going to come down on all of that. tax reform is such a big piece of this president's legislative agenda. we haven't seen the real specific details of it yet. we are promised those at some

point in the weeks to come. the president has been touting his tax reform package in general terms in appearances before cameras over the past week or so. we'll wait and see which side of this debate he comes down on and whether that shifts paul ryan's thinking. >> thank you very much. >> here is the president. >> it is a great honor to be here. this was some beautiful morning and what a job they've done. like few others have been able to do. i am very, very proud of lonnie bunch, the work and the love he has in his heart for what he's done is -- i always talk about, you need enthusiasm, you need really love for anything you do, to do it successfully. lonnie, you are where? come on. where's lonnie? you should be up here, lonnie. come on. david, we have to get david up here, too. david scoton is tremendous. he was singing lonnie's praises

all morning long. you two should at least be here. we appreciate it very much. and david rubenstein, here come place. you have to get up here, david. you certainly deserve it. he's a very, very successful guy who spends money doing great things. he's been a great help to so many different groups and this one in particular. thank you. it is a privilege to be here today. this museum is a beautiful tribute to so many american heros. heros like truth, harriet tubman, frederick douglas, booker t. washington, rosa parks, the greensboro students and the african-american medal of honor recipients, among so many other really incredible heros. it is amazing to see. i went -- we did a pretty comprehensive tour but not

comprehensive enough. lonnie, i'll be back. i told you that. >> great. >> i could stay here for a lot longer. believe me. it is really incredible. i'm deeply proud that we now have a museum that honors the millions of african-american men and women who built our national heritage, especially when it comes to faith, culture and the unbreakable american spirit. my wife was here last week and took a tour, and it was something that she is still talking about. ivanka is here right now. hi, ivanka. and it really is very, very special. it is something that, frankly, if you want to know the truth, it is doing so well that everybody is talking about it. i know president obama was here for the museum's opening last fall. i'm honored to be the second sitting president to visit this great museum. etched in the hall we passed today is a quote from a run away slave who joined the union army.

he believed his fellow african-americans always looked to the united states as the promise land of universal freedom. today and every day of my presidency, i pledge to do everything i can to continue that promise of freedom for african-americans and for every american. so important. nothing more important. this tour was a meaningful reminder of why we have to fight bigotry, intolerance and hatred in all of its very ugly forms. the anti-semitic threats targeting our jewish community and community centers are horrible. and are painful and a very sad reminder of the work that still must be done to root out hate and prejudice and evil. i want to thank a great friend

of mine, dr. ben carson, and his beautiful family, candi and the whole family, for joining us today. it was very special to accompany him and his family for the first time seeing the carson exhibit. first time. i love this guy. he's a great guy. really a great guy. and he can tell you better than me, but i'll tell you what, we really started something with ben. we're very, very proud of him. hopefully, next week he'll get his approval, three or four weeks late, and you're doing better than most, right? but the democrats, they'll come along. i have no doubt, they'll come along. ben is going to do a fantastic job at hud. i have absolutely no doubt, he will be one of the great ever in that position. he grew up in detroit and had very little. he defied every statistic. he graduated from yale, and he went on to the university of

michigan's medical school. he became a brilliant, totally brilliant, neurosurgeon, saved many lives and helped many, many people. we're going to do great things in our african-american communities together. ben is going to work with me very, very closely. hud has a meaning far beyond housing. if properly done, it is a meaning that's as big as anything there is. ben will be able to find that true meaning, and the true meaning of hud as its secretary. so i just look forward to that. i look forward to watching that. he'll do things that nobody ever thought of. i also want to thank senator tim scott for joining us today. friend of mine. a great, great senator from south carolina. i like the state of south carolina. i like all those states where i won by double, double, double digits. you know, those states. but south carolina was one. tim has been fantastic, how he represents the people.

and they love him. i also want to profoundly thank alvata king for being here. as we saw her uncle's wonderful exhibit, he certainly deserves that. by the way, ms. king, i can tell you this personally because i watch her all the time, and she is a tremendous fighter for justice. so thank you very much. come up here. i have been watching you for so long. you are so incredible. i wanted to thank you for all the nice things you say about me. not everybody says nice things. >> you're the best. you're great. >> thank you. thank you, darling. appreciate it. >> so with that, we're going to just end this incredible beginning of a morning. but engraved in the wall nearby,

a quote by the reverend martin luther king jr. in 1955, he told the world, we are determined to work and fight until justice runs down like water and righteousness like a mighty stream. that's what it is going to be. we're going to bring this country together. maybe bring some of the world together. we're going to bring this country together. we have a divided country. it's been divided for many, many years. but we're going to bring it together. i hope every day of my presidency we will be honoring the determination and work toward a very worthy goal. for lonnie, david and david and ben and alvita and everybody, i just want to -- i just have to say that what they've done here is something that can probably not be duplicated.

it was done with love and lots of money, right, lonnie? lots of money. we can't avoid that. but it was done with tremendous love and passion. that's why it is so great. so thank you, all, very much for being here. i appreciate it. congratulations. this is a truly great museum. thank you. >> that is president. high praise for the national museum of african-american history and culture with a message of unity. saying he pledged to do everything to continue the promise of freedom for african-americans and every american. said that these threats to jewish community centers around the country are horrible and painful. and that the museum is a reminder of why we have to fight bigotry in all its forms. eamon, your reflections here? >> that was a full throated denunciation of bigotry and anti-semitism for a president who has been criticized for flubbing opportunities to denounce racism and

anti-semitism when he's been presented with opportunities on the campaign trail. he said this museum is a meaningful reminder of why we have to fight bigotry and hatred in all its forms. he called the anti-semitic attacks horrible and said work must be done to root out hate and evil. clearly, donald trump taking the opportunity at the african-american museum to underscore his message on race relations in this country and denounce bigotry and hatred in all its forms, carl. >> as the president's busy day continues, eamon, thanks to yqu. sarah eisen is at the largest staples food conference in boca rato raton, florida. we'll have irene rosenfeld and

tom hayes. s&p and nasdaq setting new highs. >> the dow is being driven higher. kourtney joins us with more at this hour. >> it has been a busy morning. let's start with the world's largest retailer. walmart posting a large performance for the holiday quarter with comps up 1.8%. that's the best performance in four and a half years on strong traffic and broad based strength. the retailer getting sales growth results. manufacture value up 36% over last year. that contributed 40 basis points to the 1.8% comp increase. walmart's total ecommerce gross manufacture value grew by almost 30%. the earnings beat by a penny but lighter than expected revenue. currency impact there. the discounter's first quarter and full year's guidance is better than estimates. i spoke to brett biggs.

spending got off to a slow start. he says walmart is concerned about the possibility of a border adjustment tax because of the probability of price increases if enacted, which would hurt its consumers. remember, macy's warned last month, still sales disappointed, comp sales fell 2.1% while adjusted earnings beat consensus. macy's ceo says 2016 wasn't the year we expected. the retailer now says lundgren will transition to executive chairman on march 23rd as the president takes over as ceo. we didn't have an exact date before. no new real estate monetization announced but it continues to be a focus for the department store. the housing market strength continues to lift homedepot. stronger than expected revenue. full year guidance is a touch shy of consensus. upping the dividend by 29% and a $15 billion buyback.

>> thank you so much. record highs for stocks amid the president's promises of deregulation and a new tax agenda one month into the white house. joining us is jeff knight, head of global investment solutions and charles, aerial investments vice chairman and head of the investment group there. good morning. charles, as we look at these record highs, sounds like you think things aren't all that cheap anymore. >> that's a good summary. i think they were cheap a year ago. at these levels, 17, 18 times forward earnings, you can justify it with lower interest rates. frankly, we'd say the market is somewhere over fairly valued on a scale of 1 to 10, it is between a 6 or 7 at this point. >> jeff, you're prepared to go overweight equities in the short term. >> we are. i think the market is adjusting to an expectation that we might be finally leaving an era of

secular stagnation. we see it in the economic data, see it in inflation data, earnings data. we think that's a time to be overweight equity and maybe underweight rates. >> jeff, meantime, of course, the dollar has been strong traditionally. that's something that's very tough emerging markets to deal with. we have seen data around the rest of the world pick up recently. is this a time to be buying em as opposed to avoiding it? >> i think so. i mean, valuation is absolutely a concern, particularly in the u.s. i think valuations are slightly more attractive and forgiving around the world, particularly in emerging markets. i think all we need is a dollar stability to unlock that value in the context of a cyclical upswing. we are avoiding emerging market equities, as well. >> over the -- well, since the election but the last week or two, we are celebrating this trump reflation trade. it's been good for equities over the last few months. however, is there a difference in terms of what we're actually

seeing, which is inflation, and are there more risks than people are aware of? >> i think it is a great question. if you talk about what's in the market and what's not in the market, we would say a stronger economy is in the market, but the risk of inflation is not. when you have a 2.45% ten-year bond, the bond market is not factoring in much inflation. we're starting to see a lot of factors that historically have been pro-inflation. we have the first president ever to be talking about a weaker dollar. that's never happened before. we have higher, tighter labor markets. we have minimum wage. we have higher deficits. we have higher debt around the world. all of those things have historically been inflationary, and we'd argue it is a risk that's not being fully priced in the market. >> charles, jeff, good stuff, guys. crazy times we're in as we're looking at the levels today. thanks so much. >> thanks. look at this market. we're up almost 100 points on

the dow. >> all three indexes are showing gains. less than 0.5% is not that big. but it is broad. all of the s&p sectors in positive territory. >> let's get to sarah at the consumer analyst group of new york conference with a look at what's coming up. >> good morning, again. when we come back, mondelez chairman and ceo irene rosenfeld joins me for an interview. her take on all the deal making in the sector. kraft heinz did for unilever, dropping it over the weekend. the launch of a brand-new brand of healthier foods. it is a big deal. later, we're joined by the ceo of tyson foods, tom hayes. his first interview since taking the job in january. stock up 6% since he took over. "squawk on the street" will be right back, live from boek rca raton, florida, after this break. but why don't you just go to thinkorswim's chat rooms

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nice to see you. >> thank you, sarah. >> you're introducing healthier products going to millenials. tell us about it. >> we've been watching the trends for a number of years. no question consumers asround te world are interested in healthier products for a better lifestyle. we're announcing a gmo free t s trisket today and adding protein to velveeta, for example. we're doing a lot on the base. we felt we had the opportunity to appeal to millenials, with the knew line of vea. we're new excited. it borrows from flavors around the world. it's got nuts and seeds in it and it is a delicious product. we think it'll do quite well. >> it is interesting you're g developing the new products internally instead of buying it. we've seen competitors buy others.

you're trying to do it from within. >> we do a combination. in 2015, we bought two companies. enjoy a enjoy life, a company that makes free form snacks. we're pleased with that innovation and expanded capacity in the product recently, building a factory in indiana. and we're taking the product across the ocean to a number of other markets. we bought a company in vietnam which gives us access to moon cakes and a number of other popular snacks in that region. it is a combination. the end is mind is make sure we can meet the needs of our consumers. there's about $160 billion of well-being snacks out there. we want to capture more than our fair share. >> how much work do you have to do on that front, with brands in your portfolio that are working, like oreos, chips ahoy, cad bbu. >> consumers still want to indulge. there is a sense that everybody

is moving to well-being. we certainly, on our indulgent brands, are evolving them with products like oreo thins, bubbly chocolate, making sure we have portion control packages. there are ways to meet the consumer's needs. at the end of the day, there is no question, it is a trend everywhere in the world. as the world's largest snacking company, we intend to capitalize on it. >> you're moving forward despite the fact the deal speculation kon continues to swirl. why do people think you are the next logical target for your former company, kraft and 3g? >> there is a lot of speculation out there. we can't spend a lot of time thinking about it. if you step back a second, when i split the company, i did it because these were two different portfolios and they actually have shown themselves capable of creating great value for their respective shareholders as separate companies. our company created over $60

billion of market cap as a result of focusing on snacks. we're going to continue to focus. we've been quite successful even in this challenging macro environment. i have great confidence that some of the programs we'll talk about today at the analyst conference will continue to drive our growth. >> some of that market cap had been created on speculation of a deal. were you surprised to see the stock drop 5% on friday on word that kraft heinz was chasing unilever? >> word comes in and out of stocks. our focus remains on continuing to determine what we believe is a more sustainable model of top and bottom line growth. >> i wonder if it is the presence of activists in the space and in the stock. you have one on your board. do you think it makes it -- lends itself more to the deal of speculation and deal making within the sector? >> i'd like to think it is because we've created a great company. i think that the opportunity --

we've shown our ability to generate significant margin expansion. double eps growth, even in the current environment. i think the possibility of having a portfolio that has strong categories and good geographic footprint is an attractive property. >> you went after hershey for a purchase last year. that didn't work out. what else can we expect on the m&a front? >> i'm pleased with our portfolio. some of the categories are muted in today's environment, given the challenging macros around the world. i'm quite confident they will recover over time. >> you are here to send a message that the cost cutting, the margin improvement, is going to continue. >> yes. >> sticking to your targets. how much room there? >> well, we've committed to mid 16s in 2017. we've delivered about 500 basis points since 2013. on margin expansion, driven by our supply chain reinvention, zero based budgeting, the global shared services initiatives in

place, all that is alive and well. it becomes an important source not just of margin expansion but then of fuel, to be able to invest in our growth opportunities. >> do you admire what kraft heinz has done on that front? >> i have great admiration for the work they've done on the margin front. again, i believe a more balanced profile of top and bottom line growth is a more sustainable one. >> you mentioned how tough it is in the tough macro environment. particularly in emerging markets, which is a source of growth for you. what do you see in markets like india, which had an impact on your last quarter. >> that is a short term impact. i think over the long term, it would have been the right action. it was exceptionally abrupt and took 80% of the currency out of circulation. we have a sizable business in india and it affected us. we'll get back on track. before the demonetization, our business was up nicely. >> what about the rest of emerging markets? do you expect a come back? it is interesting to see global

stocks trading at multi-year highs. pain out there from the economics and the currency. >> there's no question this is a challenging time in the emerging markets. brazil and china in particular. russia, our russia business has held us exceptionally well. obviously, very much inflation driven. the reality is, i do believe the markets will recover. one of the reasons i like snacks is they are highly correlated with gdp. as the macro economies recover, it'll be good news for our growth. that said, our entire focus is to operate within the current environment that we are in. we've given what i believe to be fairly prudent guidance within the context of that environment which allows us to continue to expand margins for the shareholders regardless of what happens in the broader environment. >> we talked about the trump administration policy. it is early and hard to tell but for a company as globally expos exposed, investors have to wonder what will happen with the rhetoric. what are you telling them, if we do see things like border

adjustment taxes, tariffs and a focus on u.s. imports. what does it mean for mondelez? >> look, as a global multi-national company headquartered in the u.s., the regulations are very important to us. we're going to need to wait and see how the policies evolve. you can't take one piece of it. my hope is the president has indicated his desire to create a vibrant global economy. as a company that does business in 165 countries in the world, that's very important to us. >> no changes on production. is the president a fan of oreos? he's calmed down about the issue. >> we have many oreo fans and i'm delighted they're continuing to eat the products, regardless of what else is going on. >> seriously, no changes in terms of where you're building factories and where you're initiating manufacturing, based on what we're seeing. >> no. >> always good to check in with you, irene. thank you for taking the time

ahead of your presentation. irene rosenfeld, the chairman and ceo of mondelez. shares flying today on the deal speculation we talked about, carl. >> nice live shot this morning, too. we'll come back to you later. speaking of flying, look at shares of popeye's louisiana t kitch kitchen. a deal, $1.8 billion, with $79 a share in cash. i am benedict arnold, the infamous traitor. and i know a thing or two about trading. so i trade with e*trade, where true traders trade on a trademarked trade platform that has all the... get off the computer traitor! i won't. (cannon sound) mobility is very important to me. that's why i use e*trade mobile. it's on all my mobile devices, so it suits my mobile lifestyle

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welcome back. uber lan unching an independent investigation into a allegation of sexual harassment at the company. >> morning, kelly. remember, the uber ceo travis kalanick is coming out of another crisis, the one that led him to resign from president trump's economic advisory counsel less than a month ago. the company has been quick to try to stem the backlash to oversee that independent review. kalanick is tapper former u.s. attorney general eric holder. also involved will be attorney tammy and board member ariana

huffington, who flew to san francisco yesterday to meet with the employees today. former engineer fowler wrote about sexual harassment and a culture of sexism that was ignored by hr and top execs at the company. the delete uber campaign trended and kalanick called the behavior in her post as abhorrent. he announced a meeting happening today and also the first comprehensive report on diversity at the company. now, the tech community at large is watching closely because, while uber has seen controversies, the problem of diversity and discrimination isn't unique to the start-up. kalanick in an internal e-mail yesterday saying the percentage of women across uber's engineering, product management and scientist words are at 15%. we have the numbers from twitter, google and facebook. they're public.

unfortunately, they're not better as you can see. that highlights the issue of diversity and gender bias in tech that many hope will get more attention after the allegations directed at uber this weekend. back to you. >> thank you very much. still to come, the new ceo of tyson foods, tom hayes, in his first television interview since taking the job. more to come as markets push to record highs. i love how usaa gives me the peace of mind and the security just like the marines did. at one point, i did change to a different company with car insurance, and i was not happy with the customer service. we have switched back over and we feel like we're back home now. the process through usaa is so effortless, that you feel like you're a part of the family. i love that i can pass the membership to my children, and that they can be protected.

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comcast business offers blazing fast and reliable internet that's over 6 times faster than slow internet from the phone company. say hello to internet speeds up to 250 mbps. and add phone and tv for only $34.90 more a month. call today. comcast business. built for business. hi there. here's your news update at this hour. a charter plane crash in australian claimed the lives of three americans on a vacation and the pilot. it crashed in flames after take off. it hit an empty shopping mall in melbourne. no one else was hurt. an israeli court sentenced a soldier to prison for a fatal shooting of a wounded palestinian attacker. prosecutors asked that the sergeant be given a three to

five year sentence. the defense wanted him freed. the verdict deeply divided israel. a levy in the san joaquin valley was breached, forcing many from their homes. the evacuations are still in place until it is deemed safe to return. amazon has lowered its non-prime membership free shipping him money from $49 to $ $35. last month, walmart lowered the minimum to $35 and sped up the delivery to two days. amazon's is five to eight days unless you sign up for prime. that's the cnbc news update at this hour. back to you, carl. >> thank you very much. more than a dozen ceos from u.s. manufacturing companies sending a letter to lawmakers calling for an end to the made in america tax. we have more on that from washington. morning. >> hi, carl. i just got off the phone call with some of the ceos. peterson of s&p global was one

of them. he said there was one benefit of the proposal. first, it simplifies the tax code, lowers the corporate rate from $35% and 20% and created a fair playing field. that's the proposal from house speaker paul ryan, lowering the cost of exports and increasing the imports. names that signed on to the letter, boeing, caterpillar, major exporters there. the ceos are banning together as the american made coalition and pushing back against the opposition to the tax we saw last week from the retail industry. it is going to be an uphill battle in the senate. several lawmakers are skeptical of the plan. everyone is waiting for the white house to come out with its own phenomenal tax plan in a few weeks. carl? >> actually, i was going to ask you about the reports that the trump administration wants to change some of the export data and how it is catcategorized.

if you bring something into the county, don't do anything to it and reexport it, it shouldn't count as a real export. you're talking about the biggest u.s. companies who are exporters here. interesting to think about how that might both increase our deficit with mexico and figure into some of the administration's future plans. >> well, you're seeing a theme here that's risen time and time again in this administration in just the few weeks that he has been in office. skepticism of official trade data. skepticism of official government data. one of the positions that actually president trump can fill is the head of the bls. so there is a lot of questions around how much is this administration going to rely on the data that we have seen governments use time and again. you're also seeing people on both sides of the aisle call for government data to remain the gold standard that it has always been. so, you know, an administration that's skeptical of data is certainly something we'll be keeping an eye on.

>> ylan, good stuff. we'll watch the tax debate, as well, from the retailers to the manufacturers. let's go to jackie for a check in on nat gas. >> look at the prices. they are dropping dramatically. about 20 cent move today. about a 7.5% move down in natural gas. if you were out this weekend on the east coast, you know how gorgeous it was. you also know the weather forecast are calling for a little bit more mild temperatures than expected at this time of the year. when it comes to nat gas, it is a weather based trade. we ran up to almost $4 in december. that's when nobody knew winter was going to be as harsh as we've seen the last couple of years. really, february when it comes to gasoline and nat gas, is seen as the springtime. that kind of season. you're seeing these prices go down, well under $3. back to you. >> it was like 70 degrees over the weekend. i was running in shorts. it is going to be 66 again on friday, they say. >> right. that's the thing, you know, traders are looking out to the

ten-day forecast. it is supposed to be much more mild than expected. as i mentioned, the last two winters here on the east coast were brutal. so this is great. it seems like an early spring, even though the groundhog said we'd have six more weeks of winter. >> the groundhog. jackie, thank you. >> sure thing. >> we head to break. look at shares of apple as the markets move much higher this morning. apple is hitter another intra-day high. when we return, we have sarah's interview with the ceo of tyson foods, tom hayes. "squawk on the street" is right back after this quick break.

with so many investors welcoming ahead to the president's tax announcement, could it be a sell the news event when it happens? find out why at trading nation.com or "squawk on the street" coming up.

welcome back to "squawk on

the street." ceos are announcing all sorts of new products and initiatives. one of those companies is tyson foods, the country's largest meat company. just unveiling a plan to eliminate antibiotics used on chicken in its flagship products. the move is an effort to boost products since higher end chicken sells at a premium. joining me is tom hayes, his first interview since taking the job at the start of the year. welcome to cnbc. >> thank you for having me, sarah. >> all of the food companies are announcing moves like fresher ingredients, antibiotic free. how big of a deal is this for tyson? you're making major changes. >> absolutely. it is a huge deal. we have so much potential in the fresh food space. it is where the shopper is going today. the perimeter of the store is where all the action is. the center of the store is buying. we are doing everything to build fresh foods. us as a poultry company, leading the antibiotics will be the largest no antibiotics ever producer in the country, the

world, in fact. it is a good place to be and we're super excited. >> which area is the hottest part of the portfolio? >> all day breakfast. people want protein all day. it's been a fantastic jimmy dean growth story for us. you can get jimmy dean for 14 grams of protein, great way to start the day and throughout the day. >> investors are asking about this revelation that came up in the quarter about the s.e.c. looking into chargers of chicken price collusion. what are you telling them on that front? i know you're fighting this. how long will it take? >> it'll last a long time. we're focused on, what do we do? we do the right things. the s.e.c. is investigating. it is reviewing. because there is an underlying case, anti-trust case, that is baseless, and really plaintiff's lawyers are grasping for straws. for us, it is noise. it'll last some time. we're excited to defend ourselves in court because we have a great story. >> how convince ed are the

investors? >> they don't like the noise but they're focused on the growth of the portfolio. it is fantastic. we are a true growth story. think about the retail products business. right now, we're the only company in the last three weeks against major competition that is growing volume. they're excited about the growth story. really coming along with us. that's the exciting part of our story today. >> food deflation has been a big story at the grocery store. what are you seeing looking out into 2017 on meat, poultry, beef and pork? >> yeah. there's a lot of protein around us today. certainly all types of protein. it is somewhat deflationary so we have to deal with that. looking for ways to value up. it is about wanting the consumer to come to tyson and use our products and be loyal consumers. for us, it is not about the deflation as much as creating the identify they want to come back to and create the relationship with our brands. >> one of the biggest buyers of u.s. meat is mexico.

there is heated trade rhetoric and a threat from this administration on a tax. if mexico were to buy less meat, would it impact prices? do you see that? >> i can talk about tyson foods and we don't export a lot to mexico. it won't hurt us so much. it is certainly an issue we're watching. >> what about china? big importer of u.s. meat, as well. >> yeah. >> what would increasing that mean for the industry? >> we export quite a bit to china, or asia, and we are focused on what is it going to be in the future? we can't control anything. for us, we focus on, what are the scenarios that are going to play out? we've been doing modeling about what is best for tyson. understanding none of it is certain. we're preparing for any outcome. >> is the preparations you're making on the idea we're going to see fewer meat exports abroad? >> you know, we feel like there is going to be bilateral agreements done. we feel it is hard to politicize

food, sarah. for us, focusing on what we do well is going to get us through the day. that's what we do. 114,000 team members focused on making great food. >> 114,000 team members. you have a big share of immigrants in the meat packing industry. i'm also wondering how the executive order and a new one prepared by the administration is impacting your work force. >> yeah. we are focusing, again, on tyson. we do have a work force that has a lot of immigrants and we're excited about that. we're a diverse company. we focus on, what do our team members need to know? how does it affect them? is there something they need help from the hr team, human resources is focused on making sure they have answers to questions. so it is more about, what are we doing at tyson foods to help our employees than being focused on too much else. >> have you come out against some of the -- this order we've seen? >> we haven't taken a stance. our view is that we want to make sure tyson is right. and continue to tell people, we will make sure we do right by

our people and continue to do right by our investors. focus on growth, focus on helping them with their careers. we're a growth company, not just for consumer products but also for our people. we have a good value proposition for our employees. and we think it is critical to make sure they're well suited to face anything that comes out. >> back to the customers for a moment. you mentioned you're in the sweet spot in the perimeter of the grocery store. that's a trend that's working. the bump in consumer it was that we've seen after the election, do you see that translated into more spending at the grocery store? >> you know, what we see is in the second quarter of the year, usually a difficult time for us because consumers are coming off the holidays. the holiday period, based on the product portfolio, is a huge period for us. right now, we're not necessarily seeing that play through. certainly, confidence is building. it helps the restaurant business, our food service business is gaining momentum. overall, of course, people are going to be focused more on the brands. more confidence is better for us. >> what are you seeing in terms

of processed meats, ever since the warning came out in 2015 from the world health organization about processed meats leading to increased cancer rates. has there been a shift in the way people are buying meat? >> we haven't seen it, sarah. what we would say is that consumers do want fresh. they want fresh, less processed, and that's the focus on our innovation. think of tyson, no antibiotics ever, that's the message consumers want to hear. as we drive that story across our entire portfolio, we attract consumers. so the fresh story is big. flexible eating. gone are three meals a day. it is snacking throughout the day. we have hillshire snacking. we're doing a lot to address consumer trends. fresh food is the most prominent. >> thank you for joining us. giving us a status check on the business and our first interview here. tom hayes is the new ceo of tyson foods. i'll send it back to you, kelly. i'll be back in a bit. >> great stuff. thank you, guys.

just said people want protein all day. breakfast is the hottest category for tyson. let's go to john for a look at what's coming up. >> we're going to give you something to chew on in "squawk alley." uber, another week, another scandal. we'll dig into what it means for the company and silicon valley at large. also, snapchat, some more competition for that company as it gets ready for its ipo. of course, we'll be back with sarah. all that and more coming up on "squawk alley." i never get tire. i never get tire. are you entirely prepared to retire? plan your never tiring retiring retired tires retirement with e*trade. i'm in vests and as a vested investor in vests i invest with e*trade, where investors can investigate and invest in vests... or not in vests. sign up at etrade.com and get up to six hundred dollars.

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stocks hitting record levels. the dow surging higher. 121 points. 73 companies hitting fresh 52-week highs. including amazon, depot, goldman sachs among them. let's bring in art to make sense of today. 3/4 of the way to 24 k now. >> right. >> you said we're overbought. how overbought are we? >> significantly overbought now. i think we're vulnerable in the sense that the things like the advanced decline indicator is not keeping up with the rate of the rally.

we're above -- 8% above the 200 day moving average. close to 10% above in the s&p. that's usually a warning signal. but i think what's going on is you're getting a little bit of a celebratory bit of a cel celebatory over move. and i think markets have decided that may be the deadline of the state of the union message. so if the border tax is dead as it appears to be, or appears to be in the intensive care unit, anyway, that would mean a revenue neutral tax reform is unlikely. the markets are guessing the president may just say trust me, i know this will produce a bigger deficit, but it will make the economy grow so rapidly that the taxes will catch up. so i think we're going to separate out. i think they see the timing here. they have been patient, waiting

about details, timing, and whatever. and now i think they see the show down coming real ti to the state of the union. >> does that mean the next move comes in bonds, not stocks? >> the bonds have been very patient with what is going on. there could be enough tea party rebellion that could keep him from getting a tax reform package. and that is the real spread. if the stock market starting to believe that then we're going the other way. with tax reform, corporate earnings could look good next year. >> last week we saw yields move higher, that allows banks to yield the rest of the market. health care, still up nearly half a percent. what is driving the broad positivity this morning. >> i think it is the idea that they're believing that we're coming close to a move if he gets his programs through the

belief is, with the corporate tax reform, that everyone will prosper. if the economy gets moved up, it gets prod. so they're throwing the dice and the bond guys are not buying into it. >> we have a snap road show today. lots more talk. there is more moving this morning that they could be a target. is that something that you're factoring into your overbought theory? or the fact that we have ipos combing through. could that off set your septemb skepticism. >> it could change things slightly, but to your point i'm factoring in, and i am adding to the enthusiasm. it is helping the over bought

conditions. >> meanwhile, the vix is not even 12. the s&p has not gone 1% either direction, can that continue? >> until the state of the union. i think we're really coming to a point where you're going to see things change. i think the president is going to have to at least give some hint of details. if he just gets up and says i'm still working on this package and it's wonderful -- >> what is worse, is it worse if he does the tax reform even if it blows up the deficit for the markets, or worse if he just can't do it at all. >> i think it will be bad if he can't do it at all. i think what you want to watch for is, i'm guessing along with the market that he will push it through, and there is an immediate negative response if the teap party group in congres says you can't get this done. but you can build up to a very, very important time here.

and the other thing to watch is oil. it has been trading in a rectangle, wti between 51 and 55. if it rallies further and breaks out through 55, that will add to a lot more excitement. >> energy leading the way today. >> we'll be touching base with you for the next week for sure. >> still to come, the latest on gender bias. it's a very simple procedure, mr. diaz. we're just going to make one small incision here, then we're gonna go in and remove your '67 corvette. my vette!? it's just a gall bladder! you don't have.. aflac! paying you cash, so you might have to sell that sweet little muscle machine just to cover your rent. more funny juice. but my papa gave me...that...car.

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quarterly results and reaction from company ceo's. their presidential policies ta could work for investors. welcome back to "squawk on the street." i'm rick santelli, i would like to welcome ira harris from arizona. thanks, ira. >> my pleasure, thank you. >> as i look at the board, i see the dow is up 5%. the nasdaq up 9%, the dollar index is down .7 5% on the year. what do you think, global investors must be stupid to buy into all of this when everyone is saying this car is going too fast considering how much air is in the tires. >> you know, rick, it's still

based, we're seeing, as you rightly pointed out long ago, the two regulation change, and tax reform are driving this, but more importantly, we're still at zero internet rates on a global basis. and the buy in is still $80 billion a month. you still have qe. zero interest rates are still the backdrop to all of this. >> when i look at the dollar down .75%, i can't help but think of border adjustment tax. a quasi adjustment tax. do you think it is a good idea? >> no, and let me mik up from what i was just listening to, i'm listen from a global macro perspective. all of their models, they make assumptions that you and i don't

know about. their assumption is that it will be off set by a 20% increase in the value of the dollar. that's how they're selling it in order to make this revenue neutral and to make it less harmful to the overall economy. but if you get a 20% appreciation in the dollar, and you add a value tax on imports coming into the country, you're going to cause a massive, and mark my words on this, a massive global slow down that because of the huge amount of debt that overhangs the global system may become a global depression. until they explain to me what their model has farce loas far looking at the global financial system, i'm not buying it. >> from the standpoint of appreciation, you're saying if you have dollar denominated debt, it's going to hurt you even though it is a fix to bring revenue neutral home.

i know that for the most part we still have a handy cut how tax cuts filter through the growth in the economy. is that something that we should consider more aggressively before jumping to the notion that bats is the only way to be revenue neutral? >> yes, rick, everything that i look at it always dynamic in nature. so the static scoring, forget about it. but you have to look at it, but again it's going to be the impact on the global system. and more importantly it takes place because we are the world's global reserve currency. if you're going to stop that, there will be a huge price to be paid on the global financial system. because of the amount of debt. >> ira, we'll have to pick this up when we see the legislation, thank you and guess what? time to shift gears and go to carl with "squawk alley." >> thank you,